Prepaid Gains More Love from Canadians, but Bank Execs Might Have Worries
Reloadable prepaid cards are a hit with Canadian consumers, with 95 percent of them saying they are satisfied with the products in 2016. That represents an increase of 22 percentage points from 2015, and stands as the highest satisfaction rate for all payment tools, according to the second annual survey from the Canadian Prepaid Providers Organization.
The trade group, which based its new findings on a survey of 1,006 consumers, said that satisfaction with single-use prepaid cards increased by 14 percent, reaching 89 percent in 2016. Part of that satisfaction no doubt comes from happy parents, as the survey report also said that “60 percent of consumers find it appealing to use prepaid cards to help their children manage their money [and] 47 percent of those with kids under 18 at home would consider doing this.”
The “How Canadians Pay Today” survey includes signals that might trouble some bank executives: 33 percent of respondents said they do not want to use “traditional banks because alternative providers and new tools are cheaper and more convenient.” Additionally, 26 percent prefer to use such digital payment tools as Apple Pay, which last year expanded its Canadian presence. Already, 59 percent of Canadian consumers have used such products; of those, 70 percent cite convenience as the main reason for doing so.
The survey also found that:
- More consumers are seeking out American Express, Mastercard and Visa prepaid cards compared to 2015.
- An American Express, Mastercard and Visa prepaid card user is more likely to be male, between the ages of 18 and 44, and a user of an alternative payment method than other consumers.
- 66 percent are concerned about the security of their credit and debit cards for online purchases. But only 28 percent expressed similar concerns about prepaid cards.
“Canada has both a highly banked population and many consumers with a strong willingness to try new financial services products,” said David Eason, CPPO co-founder and chairman of the board. “This year’s survey revealed that younger Canadians in particular are adopting emerging payment tools that are more convenient and secure.”